Financial statements
Section B: Notes to the Group financial statements for the year ended 30 June 2024
Section B: Notes to the Group financial statements for the year ended 30 June 2024
B22
Equity accounted investments
Associates and joint ventures accounting policy The Group accounts for entities in which it has significant influence, but not control or joint control, over the financial and operating policies as associates. The Group accounts for entities in which it has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities as joint ventures. Interests in associates and the joint ventures are accounted for using the equity method. They are initially recognised at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit and loss and other comprehensive income of equity accounted investees, until the date on which significant influence or joint control ceases. When the Group’s cumulative share of losses in an associate or joint venture exceeds its investment in the asset, the Group does not recognise any further losses. Distributions received reduce the carrying amount of the equity accounted investment. The Group currently has an interest in one associate being Bluedot. The Group’s investments in joint ventures during the reporting period comprise STP JV, NWRG, TC, A25 and AM Partners. Joint Ventures STP JV (50% ownership interest) The Group has a 50% ownership interest in the STP JV (including STP Project Trust, STP Asset Trust, STP PT Pty Ltd and STP AT Pty Ltd), which holds 100% of the WestConnex Group. WestConnex has long-dated concessions through to 2060 and includes 49 kilometres of new or improved motorway linking Sydney’s west and southwest with the CBD, and the corridor to Sydney Airport and Port Botany. The following entities are part of the WestConnex Group: • WCX Asset Trust (parent of entities responsible for financing and construction of the respective motorways within the WestConnex Group); • WCX AT Pty Ltd (trustee of WCX Asset Trust); • WCX Project Trust (parent of entities responsible for operating the motorways within the WestConnex Group); and • WCX PT Pty Ltd (trustee of WCX Project Trust). KEY ACCOUNTING ESTIMATE AND JUDGEMENT The Group’s assessment that it does not control the STP JV has been made by considering the terms of the Investor Agreement signed by the JV partners and the ongoing compliance with the Investor Agreement. This Agreement requires a supermajority vote of at least 91.5% of all investors for the decisions on the significant relevant activities made by the STP JV. Therefore, noting this and other factors, the Group has concluded that it, together with other STP JV partners, jointly controls the STP JV and its controlled entities. NWRG (50% ownership interest) The Group has a 50% ownership interest in NWRG (including NorthWestern Roads Group Pty Ltd and NorthWestern Roads Group Trust), which holds 100% of the Westlink M7 Group and the NorthConnex Group. Westlink M7 holds the concession to design, construct, finance and operate the Westlink M7 Motorway in Sydney until June 2048, and NorthConnex holds the concession to design, construct, finance and operate the NorthConnex Tunnel in Sydney until 2048. In February 2023, the NSW Government agreed to an extension of the Westlink M7 Motorway concession by 3.2 years to fund the M7-M12 Integration project. This extension is conditional on the completion of construction works (expected in calendar year 2026).
The following entities are part of the Westlink M7 Group: • WSO Co Pty Limited (the operator of the motorway); • Westlink Motorway Limited (the nominee manager of the Westlink Motorway Partnership); • WSO Finance Pty Limited (the financier of the motorway); and • Westlink Motorway Partnership (was responsible for the construction of the motorway). The following entities are part of the NorthConnex Group: • NorthConnex Company Pty Limited (the operator of the tunnel); and • NorthConnex Finance Pty Limited (the financier of the tunnel).
KEY ACCOUNTING ESTIMATE AND JUDGEMENT The Group’s assessment that it does not control NWRG has been made by considering the terms of the Equity Participants Deed signed by the JV partners and the ongoing compliance with this Deed. This Deed requires a supermajority vote of at least 76% of all investors for the decisions on the significant relevant activities made by NWRG. Therefore, noting this and other factors, the Group has concluded that it, together with other NWRG partners, jointly controls NWRG and its controlled entities.
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